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UTV Media PLC (UTV)

Thursday 12 March, 2009

UTV Media PLC

Final Results

Preliminary Announcement
31 December 2008
UTV Media plc
("UTV" or "the Company" or "the Group")
Preliminary Results
for the year ended 31 December 2008
Financial highlights on continuing operations
* Group turnover up 6% to £120.3m (2007: £113.8m)
* Pre-tax profits before exceptional items of £20.3m (2007: £20.8m)
* Group operating profit, including associates, is £28.1m (2007: £28.1m)
* Radio operating profit, including income from associates, up 12% to £18.5m
(2007: £16.6m) accounting for 66% of total
* Television operating profits down 24% to £7.7m (2007: £10.1m)
* New Media operating profits up by 44% to £2.0m (2007: £1.4m)
* Anticipated cost savings of £5m in 2009
* Exceptional costs before tax of £4.5m (2007: £1.0m)
* Final dividend of 2.00p (2007: 8.30p) resulting in a full year dividend of
5.30p (2007: 13.50p)
* Raised a net £47.5m in a 2 for 3 rights issue
* New banking facilities totalling £95m and €50m in place through to July
2013
Operational highlights on continuing operations
* Tibus acquired on 12 February 2008 for £4.05m (including costs) and FM104
on 10 April 2008 for £43.6m (including costs)
* Radio revenue up by 13% to £70.8m (2007: £62.8m)
* GB Radio revenue marginally down to £45.9m (2007: £46.2m) but with
talkSPORT revenue up by 6% to £22.7m (2007: £21.4m)
* Irish radio revenue up by 50% to £24.9m (2007: £16.6m) with like for like
revenue growing by 1%
* Television advertising revenue reduced by 7% to £35.4m (2007: £38.2m)
* New media revenue up by 18% to £11.5m (2007: £9.8m)
John McCann, Group Chief Executive, UTV Media plc, said:
"Given the wider context of the economy and advertising markets, I am pleased
with today's results and our prospects for the future."
"These are clearly unprecedented times and the impact on the Irish and UK
economies is well documented. The advertising sector is feeling the full force
of the downturn and clearly that is an issue we are actively addressing. We
moved early to raise capital and reduce debt through the rights issue and have
aggressively cut costs throughout the business. Consequently we have once again
outperformed the broadcasting sector and I believe we have the ability to
maintain that outperformance. We are not complacent about the situation, but as
a management team we are confident of the operational and financial strength of
UTV Media."
Key Dates
* 21 May 2009 - date of Annual General Meeting
* 29 May 2009 - record date for payment of dividends
* 15 July 2009 - payment of dividends
For further information contact:
Maitland +44 (0) 20 7379 5151
Anthony Silverman
Rowan Brown
UTV Media plc
John McCann Group Chief Executive +44 (0) 28 9026 2202
Norman McKeown Group Finance Director +44 (0) 28 90 26 2098
Orla McKibbin Head of Communications +44 (0) 28 9026 2188
Chairman's Statement
Introduction
After delivering a strong first half year performance, it became apparent that
market sentiment was becoming increasingly negative and your Board took early
and decisive action to mitigate the impact of the consequent downturn in
advertising revenue upon your company. We raised fresh equity through a rights
issue and used the net proceeds to reduce our debt, which was re-financed
through to 2013. We disposed of loss making businesses and implemented a
rolling cost reduction programme, with every element of our cost base being
subjected to continuous review and challenge. We swiftly and efficiently
integrated our acquisitions in new media and Irish radio into our existing
divisions, maximising operational efficiencies. And, in challenging market
conditions, we again delivered revenue outperformance of our peer groups. These
actions enabled us to achieve pre-exceptional, pre-tax profit from continuing
operations of £20.3m, compared to £20.8m recorded in the previous year. While
the exceptional costs of the measures we have taken have been fully provided
for in 2008, the benefit of our actions will be realised from 2009 onwards.
Results from continuing operations
Group turnover increased by 6% to £120.3m (2007: £113.8m), driven by a £7.5m
uplift due to our acquisitions in Irish radio and new media and also to a
significant appreciation in the sterling value of our euro revenue and
partially offset by a £3.3m reduction in television revenue.
Operating profit, including associates, before exceptional items was maintained
at £28.1m (2007: £28.1m), with radio operating profit of £18.5m (2007: £16.6m)
comprising 66% of the total. New media operating profit was also higher at £
2.0m (2007: £1.4m) but television operating profit fell to £7.6m (2007: £
10.1m).
After net interest charges of £8.1m (2007: £7.4m), and foreign exchange gain of
£0.3m (2007 : £ 0.1m) pre-tax profit before exceptional items was down by 2% to
£20.3m (2007 : £20.8m). Pre-tax exceptional costs on continuing operations of £
4.5m (2007: £1.0m) comprised £2.4m in respect of redundancy payments, £0.7m in
respect of the consolidation of radio operations and restructuring and £1.4m of
debt finance costs.
Net debt at 31 December was £107.6m (2007: £107.2m)
Dividend
In my Interim Statement, I indicated that in uncertain economic conditions it
would be prudent to conserve cash but that a dividend policy incorporating a
cover ratio in the range 1.75 - 2.0 times still seemed appropriate. Since that
Statement, global economic conditions have deteriorated sharply and your Board
believes that a more cautious approach should be adopted until some stability
returns to the economy. Therefore, we are recommending a final dividend of
2.00p (2007: 8.30p), making a total for the year of 5.30p (2007: 13.50p). The
final dividend will be paid on 15 July 2009 to all shareholders on the Register
at the close of business on 29 May 2009. The Annual General Meeting will be
held on 21 May 2009.
Radio
Revenue from continuing operations in our radio divisions increased by 13%
during the year to £70.8m (2007: £62.8m), accounting for 59% of total group
revenue. This increase was driven by our Irish radio operations which recorded
a 50% improvement in revenue due to the acquisition of FM104 in Dublin and the
effect of a more favourable euro exchange rate. Excluding these two factors,
our Irish radio revenues were marginally up on the previous year. The same two
factors, and also a reduction in losses at our new Belfast station to £0.5m
(2007: £0.7m), boosted operating profits from our Irish radio stations by 54%
to £8.0m (2007: £5.2m).
Revenue from continuing operations from our GB radio stations was marginally
down at £45.9m (2007: £46.2m) but this significantly outperformed a market
decline of 6%. talkSPORT's performance in this depressed marketplace was
particularly impressive, recording a 6% improvement in revenue to £22.7m (2007:
£21.4m). Revenue from continuing operations at our local radio stations was
down by 6% to £23.2m (2007: £24.8m) which was broadly in line with the local
radio market across the UK. Central FM, our start up radio station in Preston,
came on air on 25 September 2008 and incurred an operating loss of £0.3m in the
period to 31 December 2008. The performance of our GB radio stations was
reviewed against the backdrop of the increasingly harsh macroeconomic
conditions and, as a result, we decided to dispose of our radio stations in
Dundee, Stockport, and Edinburgh. The combined pre-tax losses of those
discontinued operations in the year was £1.5m (2007: £2.0m). Excluding those
losses, operating profit from our GB radio stations was £10.5m (2007: £11.4m).
Television
The impact of the advertising downturn on television was exacerbated for the
ITV 1 network by the damaging mechanism of Contract Rights Renewal. While the
UK television market was 5% down, ITV 1 was down by 8%. Our television division
again outperformed, but our advertising revenue was still down by 7%, or £3.2m,
to £35.4m (2007: £38.2m). Cost reductions did help to offset some of the
revenue loss, but television operating profit was down by 24% to £7.7m (2007: £
10.1m).
An unwelcome, and unnecessary, distraction during the year was ITV plc's much
publicised assertion that it was subsidising UTV, Scottish and Channel
Television. We absolutely refuted this assertion and, along with Scottish
Television, commissioned research which demonstrated that ITV plc's claim of
subsidy was completely without merit. This research has been made available to
Ofcom.
New Media
The acquisition of Tibus, a web development company, on 12 February 2008 was a
key element of our strategy to refocus on content delivery and to improve
margins in our new media business. Tibus has been successfully integrated into
our new media business and has performed strongly in line with our
expectations. With improved margins, revenue growth of 18% to £11.5m (2007: £
9.8m) has delivered a 44% increase in operating profit to £2.0m (2007: £1.4m).
Cost Reduction Programme
I referred above to the measures which we have taken to mitigate the impact of
the economic downturn. The severity of the recession requires a decisive
response on costs, and the closure of loss-making businesses and the
implementation of a radical cost-cutting plan are key elements of that
response. We would expect that the actions we have taken will benefit pre-tax
profit by some £5m in the current year.
Prospects
The sharp deterioration in the macroeconomic environment over the last few
months has put considerable downward pressure on demand for advertising across
all marketplaces. In the UK, in the first quarter of 2009 total television
advertising is forecast to be down by 17% while the ITV 1 network is forecast
to be down by 21%. Total UK radio advertising in the first quarter is forecast
to be down by 23% with national advertising particularly poor at 28% down. Our
revenue performance in the first quarter is forecast to be somewhat better than
this, with our GB radio division recording a 15% decline while television is
forecast to be down by 19%.
Revenue in our Irish radio division is forecast to be down by 15% on a like for
like basis in the first quarter. However, a favourable exchange rate and the
inclusion of FM104 will result in a 35% increase in the forecast revenue for
the first three months. Our new media division will record modest revenue
growth in the first quarter.
Airtime bookings continue to be extremely short term and visibility, therefore,
is very limited. However, the rate of decline is expected to decrease in the
second half of the year when the comparative figures will be much softer.
Trading outperformance has been at the heart of your company's success over the
past few years and we continue to believe in our ability to maintain that
outperformance.
People
I am very aware of the additional pressures which these extremely challenging
times put on our Board, management and staff and, on your behalf, I wish to
thank them for their continuing dedication and commitment to the company. I
also wish to welcome Mr Shane Reihill, who joined the Board on 10 September
2008.
John B McGuckian
Chairman
12 March 2009
Group Income Statement
For the year ended 31 December 2008
Results Results
before before
Exceptional Exceptional Exceptional Exceptional
Items Items Total Items Items Total
2008 2008 2008 2007 2007 2007
Notes £000 £000 £000 £000 £000 £000
Continuing
operations
Revenue 2 120,283 - 120,283 113,824 - 113,824
Operating costs (92,431) - (92,431) (86,012) - (86,012)
----- ----- ----- ----- ----- -----
Operating profit 2 27,852 - 27,852 27,812 - 27,812
from continuing
operations before
tax and finance
costs
Non-operational - (3,159) (3,159) - (955) (955)
exceptional costs
Share of results of 260 - 260 244 - 244
associates
accounted for using
the equity method
----- ----- ----- ----- ----- -----
Profit from 2 28,112 (3,159) 24,953 28,056 (955) 27,101
continuing
operations before
tax and finance
costs
Finance revenue 382 - 382 547 - 547
Finance costs (8,526) (1,367) (9,893) (7,961) - (7,961)
Foreign exchange 316 - 316 97 - 97
gain
----- ----- ----- ----- ----- -----
Profit from 20,284 (4,526) 15,758 20,739 (955) 19,784
continuing
operations before
tax
Taxation 4 (4,396) (378) (4,774) (4,876) 1,376 (3,500)
------ ------ ----- ------ ----- -----
Profit from 15,888 (4,904) 10,984 15,863 421 16,284
continuing
operations after
tax
Discontinued
operations
Loss from (1,054) (669) (1,723) (1,434) - (1,434)
discontinued
operations
------ ------ ----- ------ ---- -----
14,834 (5,573) 9,261 14,429 421 14,850
------ ------ ----- ------ ---- -----
Attributable to:
Equity holders of 14,553 (5,573) 8,980 14,277 421 14,698
the parent
Minority interests 281 - 281 152 - 152
------ ------ ----- ------ ---- -----
14,834 (5,573) 9,261 14,429 421 14,850
------ ------ ----- ------ ---- -----
Earnings per share 2008 2007
Continuing operations
Diluted 5 13.85p 26.86p
Basic 5 13.85p 27.19p
Adjusted 5 20.20p 26.86p
Diluted adjusted 5 20.20p 26.53p
From continuing and discontinued operations
Diluted 5 11.62p 24.47p
Basic 5 11.62p 24.77p
Adjusted 5 18.84p 24.44p
Diluted adjusted 5 18.84p 24.14p
Group Statement of Recognised Income and Expense
For the year ended 31 December 2008
2008 2007
Notes £000 £000
Income and expenses recognised directly in
equity
Exchange difference on translation of foreign 17,293 2,948
operations
Net actuarial (loss)/gain on defined benefit (7,813) 1,514
pension schemes
(Loss)/Profits on cash flow hedges taken to (1,855) 136
equity
Tax on items taken directly to or transferred 2,730 (24)
from equity
------- -------
Transfers to the income statement 10,355 4,574
On cash flow hedges (1,005) (813)
------- -------
Net income recognised directly in equity 9,350 3,761
Profit for the year 9,261 14,850
------- -------
Total recognised income and expense for the year 18,611 18,611
------- -------
Attributable to:
Equity holders of the parent 8 18,330 18,459
Minority interests 8 281 152
------- -------
Total recognised income and expense 18,611 18,611
------- -------
Group Balance Sheet
At 31 December 2008
2008 2007
ASSETS Notes £000 £000
Non-current assets
Property, plant and equipment 11,581 10,452
Intangible assets 270,542 189,628
Investments accounted for using the equity method 151 198
Other investments - 300
Deferred tax asset 16,783 17,060
------- -------
299,057 217,638
------- -------
Current assets
Inventories 491 493
Trade and other receivables 30,895 27,931
Derivative financial assets - 902
Cash and short term deposits 9,280 10,237
------- -------
40,666 39,563
------- -------
TOTAL ASSETS 339,723 257,201
------- -------
EQUITY AND LIABILITIES
Equity attributable to equity holders of the
parent
Equity share capital 8 55,557 8,086
Capital redemption reserve 8 50 50
Treasury shares 8 (1,258) (740)
Foreign currency reserve 8 18,646 1,353
Cash flow hedge reserve 8 (1,455) 902
Retained earnings 8 56,475 61,405
------- -------
128,015 71,056
Minority interest 8 593 312
------- -------
TOTAL EQUITY 128,608 71,368
------- -------
Non-current liabilities
Financial liabilities 7 108,267 107,032
Pension liability 8,593 1,861
Provisions 1,100 910
Deferred tax liabilities 49,037 38,420
------- -------
166,997 148,223
------- -------
Current liabilities
Trade and other payables 31,612 25,103
Financial liabilities 7 8,650 10,391
Derivative financial liabilities 1,958 -
Tax payable 1,556 1,697
Provisions 342 419
------- -------
Net current liabilities 44,118 37,610
------- -------
TOTAL LIABILITIES 211,115 185,833
------- -------
TOTAL EQUITY AND LIABILITIES 339,723 257,201
------- -------
Group Cash Flow Statement
For the year ended 31 December 2008
2008 2007
Notes £000 £000
Operating activities
Profit before tax 13,575 17,736
Adjustments to reconcile profit before tax to net
cash flows from operating activities
Foreign exchange gain (316) (97)
Net finance costs before exceptionals 8,144 7,414
Share of results of associates (260) (244)
Non-operational exceptional costs 5,245 955
Depreciation of property, plant and equipment 1,879 1,829
Difference between pension contributions paid and (1,435) (607)
amounts recognised in the income statement
Decrease in inventories 6 45
Decrease in trade and other receivables 417 1,282
Increase/(decrease) in trade and other payables 2,095 (2,616)
Increase in provisions 113 199
Profits from sale of property, plant and equipment (5) (30)
Share based payments (417) 417
------ ------
Cash generated from operations before exceptional 29,041 26,283
costs
Exceptional costs (1,492) (1,723)
Tax paid (443) (417)
------ ------
Net cash inflow from operating activities 27,106 24,143
------ ------
Investing activities
Interest received 409 534
Proceeds on disposal of property, plant and 16 71
equipment
Purchase of property, plant and equipment (1,963) (1,257)
Dividends received from associates 154 91
Proceeds from disposal of investment & joint 140 928
venture
Outflow on acquisition of subsidiary undertaking (46,108) (1,440)
Acquisition of trade and net assets (100) (400)
------ ------
Net cash flows from investing activities (47,452) (1,473)
------ ------
Financing activities
Borrowing costs (10,875) (8,447)
Swap income 1,005 813
Proceeds from exercise of share options - 107
Acquisition of treasury shares (518) (380)
Dividends paid to equity shareholders (7,877) (7,216)
Dividends paid to minority interests - (55)
Repayment of borrowings (51,806) (10,639)
Proceeds from borrowings 41,705 -
Share placement - 5,346
Rights issue 47,529 -
------ ------
Net cash flows used in financing activities 19,163 (20,471)
------ -------
Net (decrease)/increase in cash and cash (1,183) 2,199
equivalents
Net foreign exchange differences 226 141
Cash and cash equivalents at 1 January 10,237 7,897
----- -------
Cash and cash equivalents at 31 December 7 9,280 10,237
----- ------
Notes to the Group Financial Statements
1. Basis of preparation
The Group's financial statements consolidate those of UTV Media plc, and its
subsidiaries (together referred to as the "Group") and the Group's interest in
associates and jointly controlled entities.
The Group financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the European
Union as they apply to the financial statements of the Group for the year ended
31 December 2008 and applied in accordance with the Companies (Northern
Ireland) Order 1986. The accounts are principally prepared on the historical
cost basis except where other bases are applied under the Group's accounting
policies.
The financial information set out herein does not constitute the Company's
statutory report and accounts for the year ended 31 December 2008.
2. Revenue and segmental analysis
Revenue represents the amounts derived from the provision of goods and services
which fall within the Group's ordinary activities, stated net of value added
tax. Revenue from Radio and Television activities is generated from advertising
and sponsorship. Revenue from New Media is generated from the provision of
internet services. The amount of revenue derived from the sale of goods or
other activities is immaterial and therefore has not been separately disclosed.
Transfer prices between business segments are set on an arm's length basis in a
manner similar to transactions with third parties.
The Group's primary reporting format is business segments and its secondary
format is geographical segments. The operating businesses are organised and
managed separately according to the nature of the services provided, with each
segment representing a strategic business unit that offers different services
and serves different markets.
Business segments
The Group operates in four principal areas of activity - radio in GB, radio in
Ireland, commercial television and new media. Discontinued operations relate to
a number of loss making radio stations in GB which were identified for sale or
closure. The following tables present revenue and profit information regarding
the Group's business segments for the years ended 31 December 2008 and 2007.
Revenue
Year ended 31 December 2008
Continuing Operations
Radio Radio New Discontinued
GB Ireland Television Media Total Operations
£000 £000 £000 £000 £000 £000
Sales to third 45,900 24,870 38,001 11,512 120,283 1,317
parties
Intersegmental sales 1,005 1,173 1,317 - 3,495 -
----- ------ ------ ------ ------ ------
46,905 26,043 39,318 11,512 123,778 1,317
----- ------ ------ ------ ----- ------
Year ended 31 December 2007
Continuing Operations
Radio Radio New Discontinued
GB Ireland Television Media Total Operations
£000 £000 £000 £000 £000 £000
Sales to third 46,165 16,587 41,278 9,794 113,824 1,749
parties
Intersegmental sales 1,028 719 977 60 2,784 -
----- ----- ----- ----- ------ -----
47,193 17,306 42,255 9,854 116,608 1,749
----- ----- ----- ----- ----- -----
Results
Year ended 31 December 2008
Continuing Operations
Radio Radio New Discontinued
GB Ireland Television Media Total Operations
£000 £000 £000 £000 £000 £000
Profit before 10,202 8,028 7,650 1,972 27,852 (1,465)
exceptional costs,
tax and finance
costs
Associate income 260 - - - 260 -
Exceptional cost (748) (587) (1,824) - (3,159) (719)
allocable to
business segments
------ ------ ------ ----- ------ ------
Profit before tax 9,714 7,441 5,826 1,972 24,953 (2,184)
and finance costs
------ ------ ------ -----
Exceptional costs (1,367) -
not allocable to
business segments
Net finance cost (8,144) -
Foreign exchange 316 -
gain
------ ------
Profit before taxation 15,758 (2,184)
Taxation (4,774) 461
------ ------
Net profit for the year 10,984 (1,723)
----- ------
Year ended 31 December 2007
Continuing Operations
Radio Radio New Discontinued
GB Ireland Television Media Total Operations
£000 £000 £000 £000 £000 £000
Profit before exceptional 11,114 5,229 10,101 1,368 27,812 (2,048)
costs, tax and finance
costs
Associate income 244 - - - 244 -
------ ----- ------ ----- ----- -----
Profit before tax and 11,358 5,229 10,101 1,368 28,056 (2,048)
finance costs
------ ----- ------ -----
Exceptional costs not (955) -
allocable to business
segments
Net finance cost (7,414) -
Foreign exchange gain 97 -
----- ------
Profit before taxation 19,784 (2,048)
Taxation (3,500) 614
----- ------
Net profit for the year 16,284 (1,434)
----- ------
3. Exceptional items
Continuing Discontinued
Operations Operations Total
2008 2007 2008 2007 2008 2007
£000 £000 £000 £000 £000 £000
Fundamental restructuring (2,859) (1,196) (719) - (3,842) (1,196)
costs
(Loss)/profit on disposal of (300) 643 - - (36) 643
investments
Costs associated with - (402) - - - (402)
aborted transaction
----- ----- ------ --- ------ -----
(3,159) (955) (719) - (3,878) (955)
----- ----- ----- ---- ----- -----
Fundamental restructuring costs
In 2008, the Group undertook a review and fundamental restructuring of its
operations. This resulted in the disposal or closure of loss making radio
stations; the consolidation of operations in both GB and Ireland; and the
rationalisation of the television operations in line with the reduction in
local programming hours introduced by Ofcom.
In 2007 the Group completed a corporate reorganisation, by way of a
Court-approved scheme of arrangement under Article 419 of the Companies
(Northern Ireland) Order 1986. Under this scheme a new listed holding company
for the Group was created. The total associated costs were £1,196,000.
Loss/profit on investments
In 2008 Channel 4 cancelled its plans to invest further in a new digital radio
platform and thus the 4Digital consortium which it led. Following this
decision, UTV has written off its 10% investment in the 4Digital.
In 2007 the Group disposed of its 8% shareholding in Somethin' Else Sound
Productions Limited and the 1.686% shareholding in Independent Television
Facilities Centre Limited, resulting in a total profit of £643,000.
Costs associated with aborted transaction
In 2007, costs totalling £402,000 were incurred in determining the feasibility
of and the potential to finance a possible transaction which did not proceed.
Exceptional finance charges of £1,367,000 in 2008 (2007: £Nil) relate to costs
incurred on the financing of the acquisition of FM104 in April 2008 and the
deferred financing costs in respect of the original debt facilities as part of
the refinancing of the Group debt facilities in July 2008.
The exceptional tax charge of £328,000 (2007: credit of £1,376,000) is
explained within Note 4.
4. Taxation
(a) Tax on profit on ordinary activities
2008 2007
£000 £000
Current income tax:
UK corporation tax on profits for the year (1,090) (149)
Adjustments in respect of previous years 800 339
-------- -------
(290) 190
Foreign tax:
ROI corporation tax on profits for the year (764) (644)
-------- -------
Total current tax (1,054) (454)
Deferred tax:
Origination and reversal of timing differences (2,931) (3,518)
Adjustments in respect of previous years - (290)
-------- -------
Tax charge in the income statement on operating activities (3,985) (4,262)
Tax credit arising on exceptional costs 991 -
Exceptional deferred tax (charge)/credit (1,319) 1,376
-------- -------
Total tax (charge)/credit (4,313) (2,886)
-------- -------
The tax charge in the Income Statement is disclosed as:
Tax expense on continuing operations (4,774) (3,500)
Tax credit on discontinued operations 461 614
-------- -------
Tax charge in the statement of recognised income and (4,313) (2,886)
expense
-------- -------
(b) Exceptional credit
During the year, the capital gains tax rate in the Republic of Ireland was
revised from 20% to 22%. Accordingly all deferred tax liabilities in respect of
radio licences in the Republic of Ireland were restated to recognise the future
gains thereon at this rate. This resulted in a net charge of £1,117,000. In
addition, the deferred tax has been reduced to reflect the phasing out of
industrial building allowances in the UK. This has resulted in an exceptional
charge of £202,000 as a result of temporary differences in respect of ACA's.
In 2007, the 2007 Finance Act asserted that the UK Corporation Tax rate from
2008 would be 28%. Accordingly all deferred tax assets and liabilities were
restated to recognise the future gains and charges to be recognised thereon at
this rate. This resulted in a net credit of £1,376,000 in the year.
5. Earnings per share
Basic earnings per share is calculated based on the profit for the financial
year attributable to equity holders of the parent and on the weighted average
number of shares in issue during the period.
Adjusted earnings per share are calculated based on the profit for the
financial year attributable to equity holders of the parent adjusted for the
exceptional items. This calculation uses the weighted average number of shares
in issue during the period.
Diluted earnings per share are calculated based on profit for the financial
year attributable to equity holders of the parent. The weighted average number
of shares is adjusted to reflect the dilutive potential of the Share Option
Schemes.
Diluted adjusted earnings per share are calculated based on profit for the
financial year attributable to equity holders of the parent before exceptional
items. The weighted average number of shares is adjusted to reflect the
dilutive potential of the Share Option Schemes.
The weighted average number of ordinary shares for the year ended 31 December
2007 and the weighted average number of ordinary shares from 1 January 2008 to
the date of the rights issue have been restated to reflect the bonus element of
the 2 for 3 rights issue of ordinary shares in July 2008.
The following reflects the income and share data used in the basic, adjusted,
diluted and diluted adjusted earnings per share calculations:
Net profit attributable to equity holders
2008 2007 (Restated)
Continuing Discontinued Continuing Discontinued
Operations Operations Total Operations Operations Total
£000 £000 £000 £000 £000 £000
Net profit 10,703 (1,723) 8,980 16,132 (1,434) 14,698
attributable to
equity holders
Exceptional items 4,526 719 5,245 955 - 955
Taxation relating (941) (50) (991) 225 - 225
to above items
Exceptional tax 1,319 - 1,319 (1,376) - (1,376)
charge / credit
------- ------- ------- ------- ------- -----
Total adjusted and 15,607 (1,054) 14,553 15,936 (1,434) 14,502
diluted profit
attributable to
equity holders
------ ------ ----- ------ ------ -----
Weighted average
number of shares
2008 2007
thousands thousands
Weighted average number of shares for basic and 77,274 59,334
adjusted earnings per share (excluding treasury shares)
Effect of dilution of the share options - 728
------ ------
Adjusted weighted average number of ordinary shares for 77,274 60,062
diluted earnings per share
------ ------
Earnings per share
From continuing and discontinued operations
2008 2007
Diluted 11.62p 24.47p
------ ------
Basic 11.62p 24.77p
------ ------
Adjusted 18.84p 24.44p
------ ------
Diluted adjusted 18.84p 24.14p
------ ------
From continuing operations
2008 2007
Diluted 13.85p 26.86p
------ ------
Basic 13.85p 27.19p
------ ------
Adjusted 20.20p 26.86p
------ ------
Diluted adjusted 20.20p 26.53p
------ ------
From discontinuing operations
2008 2007
Diluted (2.23p) (2.39p)
------ ------
Basic (2.23p) (2.42p)
------ ------
6. Dividends
2008 2007
£000 £000
Equity dividends on ordinary shares
Declared and paid during the year
Final for 2007: 8.30p (2006: 8.00p) 4,759 4,384
Interim for 2008: 3.30p (2007: 5.20p) 3,148 2,832
--- ---
Dividends paid 7,907 7,216
----- -----
Proposed for approval at Annual General Meeting
(not recognised as a liability at 31 December)
Final dividend for 2008: 2.00p (2007: 8.30p) 1,908
-----
7. Net debt
2008 2007
£000 £000
Current
Current instalments due on bank loans (8,650) (10,391)
Cash and cash equivalents 9,280 10,237
------- -------
630 (154)
------- -------
Non-current
Non-current instalments due on bank loans (108,267) (107,032)
------- -------
Total (107,637) (107,186)
------- -------
The financial liabilities at 31 December 2008 are stated net of £786,000 (2007:
£777,000) of deferred financing costs.
8. Reconciliation of movements in equity
Cash
Equity Capital Foreign flow Share
share redemption Treasury currency hedge Retained holder
capital reserve shares reserve reserve earnings equity
£000 £000 £000 £000 £000 £000 £000
Balance at 1 8,220 - (360) (1,595) 1,579 46,479 54,323
January 2007
Exercise of share 107 - - - - - 107
options
Acquisition of - - (380) - - - (380)
treasury shares
Capital 183,478 - - - - (183,478) -
restructure
Reduction in (189,065) 50 - - - 189,015 -
capital
Share placing 5,346 - - - - - 5,346
Total recognised - - - 2,948 (677) 16,188 18,459
income and expense
in the year
Share based - - - - - 417 417
payment
Dividends paid to - - - - - (7,216) (7,216)
equity
shareholders
-------- -------- ------- ------ ------ ------ ------
Balance at 31 8,086 50 (740) 1,353 902 61,405 71,056
December 2007
Acquisition of - - (518) - - - (518)
treasury shares
Rights issue 49,869 - - - - - 49,869
proceeds
Rights issue costs (2,398) - - - - - (2,398)
Total recognised - - - 17,293 (2,357) 3,394 18,330
income and expense
in the year
Share based - - - - - (417) (417)
payment
Dividends paid to - - - - - (7,907) (7,907)
equity
shareholders
-------- -------- ------- ------ ------ ------ ------
Balance at 31 55,557 50 (1,258) 18,646 (1,455) 56,475 128,015
December 2008
----- ------ ----- ----- ----- ----- -----
Shareholder Minority
equity interest Total
£000 £000 £000
Balance at 1 January 2007 54,323 215 54,538
Exercise of share options 107 - 107
Acquisition of treasury shares (380) - (380)
Share placing 5,346 - 5,346
Total recognised income and expense in the 18,459 152 18,611
year
Share based payment 417 - 417
Dividends paid to minority interests - (55) (55)
Dividends paid to equity shareholders (7,216) - (7,216)
------- ------- -------
Balance at 31 December 2007 71,056 312 71,368
Acquisition of treasury shares (518) - (518)
Rights issue proceeds 49,869 - 49,869
Rights issue costs (2,398) - (2,398)
Total recognised income and expense in the 18,330 281 18,611
year
Share based payment (417) - (417)
Dividends paid to equity shareholders (7,907) - (7,907)
------- ------- -------
Balance at 31 December 2008 128,015 593 128,608
------ ------ ------

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